The reason so many airlines have made the move is simple. It’s a huge cash cow, and brought in nearly $1 billion ($960 million) for 27 airlines charging these fees in the last quarter alone, according to the Department of Transportation. That’s a 9% in baggage fee income from 2013, and earned the airlines some $2.7 billion extra dollars so far in 2014.
While that’s nothing to sneeze at, it still is a far smaller number than ticket costs, which have brought in some $34 billion during the quarter. Still, considering these fees weren’t around 10 years ago, it’s a revenue stream most airlines aren’t going to be willing to abandon even with lower oil prices.
It’s these extra fees like the baggage fee which makes it a lot more difficult for travelers to know exactly how much their flight is going to cost. It wasn’t too long ago all charges were part of the airline ticket you bought, but now they have been broken out into a plethora of different fees. While most people hate paying a fee to check their bag, there are a few who think they are great (beyond the airlines).
Airlines do have massive costs to operate. Airlines spent $11 billion for jet fuel in the last quarter, and another $10 billion for labor fees to keep their planes in the air. While the huge drop in oil costs should help airlines reduce costs in the long run, the savings has yet to show up in ticket prices, even while gas prices for cars has tumbled. Consumers may see ticket prices drop soon if consumers decide that driving is a less expensive alternative to airplane ticket prices.
Charging to check luggage is just one way airlines are nickle and diming air travelers these days. It’s important to know how they do this so you can make choices to avoid these fees and save money when possible, so you don’t spend more for air travel than you need to.
(Photo courtesy of brownpau)